An indication hangs above a Dollar General store in Chicago on August 31, 2023.
Scott Olson |
Dollar-General Shares plunged on Thursday after the discount retailer sharply cut its full-year sales and profit forecasts, suggesting its lower-income customers were struggling in the present economic climate.
Shares of the retailer, which serves more rural areas, fell 25% after the earnings report was released.
The company now expects like-for-like sales to extend 1.0% to 1.6% for fiscal 2024, below the previous forecast of two% to 2.7%. Earnings per share for the yr are actually expected to be only between $5.50 and $6.20, down from the previous forecast of $6.80 to $7.55 per share.
“While we believe the weaker sales trends are partly due to a core customer feeling financially constrained, we also recognize the importance of controlling what we can control,” CEO Todd Vasos said in a press release.
But he also acknowledged that the corporate still has more work to do. Dollar General has said it needs to enhance its stores and inventory handling to curb losses.
Here’s how Dollar General performed within the second fiscal quarter in comparison with Wall Street expectations (based on an analyst survey conducted by LSEG):
- Earnings per share: $1.70 versus $1.79 expected
- Revenue: $10.21 billion versus $10.37 billion expected
The company reported net income for the three-month period ended August 2 was $374 million, or $1.70 per share, in comparison with $469 million, or $2.13 per share, a yr earlier.
Revenue increased to $10.21 billion, a rise of roughly 4.2% from $9.80 billion within the previous yr.
Competitors Dollar Tree The share price fell by the identical amount, by greater than 7% in early trading.
